Report: TikTok tests CTA ads to share revenue with influencers

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TikTok is piloting an advertising format with a call-to-action (CTA) button that links marketers to social influencers who post in the popular viral video app. TikTok will split the ad revenue with influencers, helping to support their creative efforts, Digiday reported.

The creator CTA ads are available to a small group of advertisers and agencies during the test. TikTok hasn't set the terms for revenue-sharing with creators, and is weighing arrangements that would give creators 20% of ad sales, Digiday reported, citing people familiar with the matter.

The new ad format would give TikTok the chance to capture some of the revenue that advertisers currently pay directly to influencers for sponsored videos.

Insight:

TikTok's reported test of a transactional ad format could be useful in attracting brands to and keeping influencers interested in the platform. Brand advertisers who are seeking more ways to measure the effectiveness of their influencer campaigns also may be interested in TikTok's new ad format. For direct-to-consumer (DTC) brands that have increased their media spending during the COVID-19 pandemic on video platforms like YouTube, an ad format with a CTA button is especially significant in helping to drive response from TikTok users.

The ad format could also help mobile marketers to set up influencer campaigns directly through the viral video app as part of their other promotional efforts. By giving influencers a way to monetize videos through revenue-sharing arrangements, TikTok can support a virtuous cycle that incentivizes creators to develop higher-quality content, which in turn, drives audience engagement.

TikTok faces competition for sought-after talent, including its influencers who got their start on rival platforms like YouTube, which has revenue-sharing plans for popular creators. The competition for talent is growing, with Facebook's IGTV offering more incentives to create videos for its platform and the livestreaming industry swelling with Amazon's Twitch, Facebook Gaming, YouTube Gaming and Microsoft's Mixer.

TikTok's test of the CTA ad format for influencers comes as the company carves out an identity as a mobile marketing platform. The coronavirus pandemic has heightened TikTok's differences from rivals like Facebook, Instagram and Twitter.

"These platforms that were once used as an escape from everyday life are now on information overload," she said. "In contrast, TikTok is the destination for fun and community, and brands should keep all of these platforms in mind when developing their social strategy," Suzin Wold, SVP of marketing at Bazaarvoice, said in emailed statements to Mobile Marketer.

TikTok's test of the ad format follows a variety of initiatives to blend influencer content with commerce as consumers become more comfortable shopping on their phones. Apparel brand Levi's this month touted its successful test of "Shop Now" buttons that let consumers buy products shown in TikTok videos, TechCrunch reported. Last year, TikTok introduced a Creator Marketplace to connect brands with influencers and started running beta tests that let creators embed links to product pages in their videos.

TikTok is especially popular with younger audiences, helping brands to connect with consumers that are difficult to reach through other media channels. Its global downloads more than doubled to 315 million in Q1 from a year earlier, lifting its total past 2 billion as people boosted their mobile usage during the COVID-19 pandemic, researcher Sensor Tower estimated. TikTok's lifetime installs in the U.S. reached 165 million, behind 611 million in India and 197 million in China, where the app is known as "Douyin." That mass audience makes TikTok much more viable as a mobile marketing platform.